Fed Survey Finds Banks Are Squeezing Consumer Even Tighter

Though billions in government stimulus money has been given out to multiple banks across the nation, the Federal Reserve today said that most are tightening their terms on consumer credit cards and are apprehensive to offer credit due to the looming December 1st deadline for rate hikes.

ABC: A quarterly survey by the Fed found that many banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers — those with sound credit histories —as well as more risky “non-prime” borrowers, who have tarnished credit.

Banks already have been pushing through rate increases in anticipation of the new rules. Because of that, the House recently approved legislation to speed up the law’s effective date and have the provisions take effect immediately, although prospects are dim for Senate passage.

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